Posttraumatic Stress Disorder (PTSD), which occurs in at least 15-20% of individuals exposed to a traumatic event, is a chronic condition associated with the development of a multitude of negative physical and mental health consequences and the co-occurrence of Major Depressive Disorder (MDD). Sleep disturbances, and especially nightmares and insomnia, are quite common in patients with PTSD, but the standard treatments for PTSD do not directly focus on sleep problems. Perhaps as a result, sleep disturbances are one of the most common residual symptoms following both PTSD treatments and depression treatments. Importantly, insomnia, depression and PTSD are each characterized by similar biological dysregulation, including alterations in important aspects of sleep (rapid eye movement sleep and slow wave sleep) as well as processes linked to health and disease (stress system responses and inflammatory processes). Directly treating sleep in the context of PTSD and MDD is feasible and can lead to robust improvements in sleep, though whether improving sleep can enhance PTSD and MDD outcomes remains to be established. This study will enroll and randomize 150 participants with PTSD, MDD and insomnia. Following baseline assessments (T1) participants will be randomized to receive cognitive-behavioral therapy for insomnia (CBTi), a well-supported and highly effective insomnia treatment, or to a monitor only control condition. Following this first intervention period all participants will receive cognitive processing therapy a trauma-focused therapy with known effects on PTSD and depression. The study will test whether and how CBTi may (1) achieve improvements in PTSD and MDD symptom severity and (2) lead to enhanced response to subsequent treatment with cognitive processing therapy. Intervening with CBTi prior to a PTSD-specific treatment and measuring biomarkers longitudinally, will allow for the testing of specific effects of sleep improvement on PTSD, depressive symptoms, objective aspects sleep and stress and inflammatory markers, thereby advancing basic understanding of biobehavioral mechanisms in PTSD and depression. Importantly, the proposed approach utilizes a treatment sequence that may appeal to trauma survivors with post-traumatic event symptoms who may be resistant to or unprepared to fully engage in standard PTSD treatments. Confirmation of the study hypotheses could support immediate translation of the findings to clinical practice.